Boyle Raises Entercom Stock To 'Buy'

Are Things Finally Looking Up?

There's further evidence that WALL STREET is seeing a light at the end of radio's recession tunnel. Analyst JAMES BOYLE of equity research firm GILFORD SECURITIES sent out a note that upgrades ENTERCOM's Estimates and raising its stock to a "Buy."

BOYLE cites several reasons for his more bullish outlook. Chief among them is an uptick in revenues in SEPTEMBER. "After improvement in June-July. when industry revenue was off 19% after Q1’s down 24% and Q2’s down 22%, the early September bookings are often 500bps or better than expected, he wrote. "It appears more and wider bright spots are perking up."

Furthermore, "There are early signs of the recession fading. Radio’s low cost and short schedules are useful for ad clients coming out of a recession that are still apprehensive about consumer rebound. We still question if the radio industry’s many years of struggling are mostly cyclical and might also fade or are likely long-term secular problems."

BOYLS concludes that ENTERCOM hit bottom in 2009 and things can only go up from here. "ENTERCOM’s revenue is likely to be off in the mid-teens year-to-year in 2009E and that is likely the low point," he wrote. "Investors have seen the stock go up 6x YTD. Which begs the question of how good, or how not as bad, will 2010E be for ENTERCOM’s top-line? Its CEO recently suggested the industry might grow revenue by double-digits against the very easy ’09 comps. Our increased revenue estimate moves to up 6.1% in ‘10E from 4.1%, which is still well below ENTERCOM’s hope."

Read the entire Note here.

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